I vividly recall my reaction after hearing House Speaker Paul Ryan say that, under the new tax law, most taxpayers would file their income tax returns using a post card. I laughed long and hard. Now that the new forms and guidance are coming out, the situation is not quite so funny.
A draft of the much-awaiting ‘simplified’ Form 1040 for the 2019 tax filing season is in the “comment period” before being published. Taxpayers and tax professionals alike have been wondering how the IRS defines “post card” and now we know. The 1040 Post Card looks nothing like the little “Having a great time! Wish you were here!” we used to send back home from a vacation. The new Form 1040 is two-sided, and each side only covers about half of a letter-sized page.
Not exactly a post card.
Here are a few more items to look forward to when you see your 2018 federal tax forms next filing season:
- No more Form 1040A or Form 1040EZ. The new Form 1040 replaces them both.
- The IRS is using a ‘building block’ approach to preparing an income tax return. In other words, a series of schedules – both new and familiar – are used to determine the total income and deductions reported on Form 1040.
- The new Form 1040 is shrinking from 79 lines down to either 23 or 24 lines. The final version has not been drafted yet.
- Six new schedules, numbered 1 thru 6, have been developed to report income and deductions that are not addressed by the lines on Form 1040.
- No changes are planned to the old, familiar Schedules A thru F, except for those required by the Tax Cuts and Jobs Act (TCJA).
- Separate forms will still be required to report additional taxes and to claim refundable and nonrefundable tax credits.
Even though the new ‘simplified’ Form 1040 for the 2019 tax filing season is still a work in progress, we can easily see that it’s longer and more complicated than a post card. All the more reason to do your homework next season, or to get assistance from a qualified tax professional.